News from the European Central Bank that it will expand its monetary stimulus with the monthly purchase of 60 billion euros (or roughly $69 billion) worth of government and private bonds until September 2016 buoyed European stocks, government bonds, as well as the U.S. stocks today. The announcement was widely expected, although the monthly sum is larger than the 50 billion euros rate reported earlier this week.
The ECB joins the club of other Central banks that, in their easing efforts, fight deflation and generate massive stimulatory efforts. While the U.S. just ended its own QE, it was the third such effort from our central bankers; the Bank of Japan is in the middle of its own easing—the size of monthly buying there, at 80 trillion yen, is tremendous in proportion to its smaller economy. Further, the Bank of England is keeping its bond-buying target intact at 375 billion pounds (on the same level since July 2012). Read more about ECB Joins the Easing Crowd 01-22-15
After a record-setting 2014, many investors need no prompting to book some gains. Growth concerns, weaker-than-expected earnings and geopolitical worries all aid the case, which is reflected in the market action over the first two weeks of the year.
The market added to the annual decline yesterday, after December retail sales missed economic estimates and recorded the largest decline since 2008, and today, as U.S. jobless claims rose to a four-month high. The result: the market as measured by the S&P 500 Index is down more than 3 percent in 2015. Read more about Increased Market Wariness 01-15-15
While the year got off to a rocky start, the market is back into the rally mode now, having erased its earlier losses. The change of mood is related to several factors, including yesterday’s release of the minutes of the latest Federal Reserve policy meeting.
Yesterday, in anticipation and upon the release of the Federal Reserve Board release of minutes from mid-December monetary policy meeting, the S&P 500 sported its first gain for this year after declining more than 4 percent in the previous five days on concerns over slowing global economic growth and the potential that Greece could exit the euro currency union. Read more about The Market Likes What It Read in the Fed Minutes 01-08-15
In light of oil's steep decline, energy shares have been slammed across the board. We think, however, that the selloff has created great buying opportunities, in select stocks. In the January 2015 issue, we highlight a number of energy and other commodity-related plays that are strong buy-low candidates.
We also review a couple of our recommended MLPs that have reached deals recently and how the acquisitions affect the MLPs' outlook.
In our Market Pulse section, we discuss the TED spread and investment implications, examine the pros and cons of multi-section mutual funds, and give a primer on medicare. Read more about Commodity Volatility and Long-Term Investing